10-QPeriod: Q1 FY2021

EOG RESOURCES INC Quarterly Report for Q1 Ended Mar 31, 2021

Filed May 6, 2021For Securities:EOG

Summary

EOG Resources Inc. (EOG) reported strong financial performance for the first quarter of 2021, reflecting a significant recovery in commodity prices compared to the prior year. Total revenues stood at $3.694 billion, a decrease from $4.718 billion in Q1 2020, largely due to lower gains from commodity derivative contracts. However, wellhead revenues surged by 31% to $3.190 billion, driven by substantial increases in crude oil, NGLs, and natural gas prices. Net income dramatically improved to $677 million ($1.16 diluted EPS) from a mere $10 million ($0.02 diluted EPS) in Q1 2020. This turnaround was primarily attributed to the rebound in commodity prices and a significant reduction in impairments, which heavily impacted the prior year's results. The company also maintained a strong balance sheet, with $3.4 billion in cash and cash equivalents and a debt-to-total capitalization ratio of 20% at quarter-end.

Financial Highlights

45 data points
Beta

Revenue

$3.69B

Net Income

$677.00M

18.3% Net Margin

EPS (Diluted)

$1.16

Total Assets

$36.17B

Cash & Equivalents

$3.39B

Free Cash Flow

$1.87B

Financial Statements
Beta
Revenue$3.69B
Operating Expenses$2.76B
Operating Income$932.00M
Interest Expense$47.00M
Net Income$677.00M
EPS (Basic)$1.17
EPS (Diluted)$1.16
Shares Outstanding (Basic)580.00M
Shares Outstanding (Diluted)583.00M

Key Highlights

  • 1Net income saw a significant turnaround, reaching $677 million ($1.16/share diluted) in Q1 2021, a substantial increase from $10 million ($0.02/share diluted) in Q1 2020.
  • 2Total wellhead revenues increased by 31% to $3.19 billion, driven by a rebound in commodity prices, with average crude oil and condensate prices up 24% and natural gas prices up 210% year-over-year.
  • 3Operating expenses decreased by $1.898 billion to $2.762 billion, primarily due to a significant reduction in impairment charges from $1.573 billion in Q1 2020 to $44 million in Q1 2021.
  • 4The company maintained a strong liquidity position with $3.388 billion in cash and cash equivalents and a debt-to-total capitalization ratio of 20% as of March 31, 2021.
  • 5Capital expenditures for the full year 2021 are projected to be between $3.7 billion and $4.1 billion, with a focus on U.S. crude oil drilling activity.
  • 6EOG announced a regular quarterly dividend of $0.4125 per share and a special cash dividend of $1.00 per share, payable in Q2 2021.
  • 7The company is proceeding with the sale of its China subsidiary for approximately $140 million, expected to close in Q2 2021.

Frequently Asked Questions

EOG Resources experienced a dramatic improvement in Q1 2021 compared to Q1 2020. Net income rose significantly from $10 million to $677 million, driven by higher commodity prices and substantially lower impairment charges. Wellhead revenues also increased by 31% year-over-year.

The primary driver was the recovery in commodity prices for crude oil, NGLs, and natural gas, which boosted wellhead revenues. Additionally, a significant reduction in impairment charges compared to the same period in the prior year (from $1.57 billion to $44 million) also contributed heavily to the improved net income.

EOG plans to invest between $3.7 billion and $4.1 billion in capital expenditures for 2021, with a strong focus on U.S. crude oil drilling, particularly in the Delaware Basin, Eagle Ford, and Rocky Mountain areas. The company expects total crude oil production to remain at fourth quarter 2020 levels.

EOG maintains a strong balance sheet with a debt-to-total capitalization ratio of 20% and a significant cash balance of $3.388 billion. The company is returning value to shareholders through dividends, including a regular quarterly dividend of $0.4125 and a special dividend of $1.00 per share announced in May 2021.